THE SIMPLE ARITHMETIC OF FUEL SUBSIDY Pt. 1

Being text of a speech delivered by Pastor ‘Tunde Bakare, Serving Overseer of The Latter Rain Assembly, at the church auditorium on Sunday, the 18th day of December, 2011.

Fellow citizens of a potentially great country being daily dehumanised by leaders who hate us, I am here this morning in the normal course of duty, the duty of a shepherd, as stipulated in the book of Jeremiah the Prophet:

“But I will gather the remnant of My flock out of all countries where I have driven them, and bring them back to their folds; and they shall be fruitful and increase.

“I will set up shepherds over them who will feed them; and they shall fear no more, nor be dismayed, nor shall they be lacking,” says the Lord.” (Jeremiah 23:3 & 4, NKJV)

God’s desire for His flock is fruitfulness and increase, but such flock require a different kind of ‘feed’ that will guarantee that they are not afraid, dismayed, or lacking anything. This special feed is “knowledge and understanding” as stated in Jeremiah 3:15 –

“And I will give you shepherds according to My heart, who will feed you with knowledge and understanding.”

My objective in this presentation is to confute the confusion created by a government that is hell-bent on the removal of oil subsidy without due regard for the feelings/sufferings of a people being pushed to the wall.

Let me start this presentation from a definitive standpoint and move on to other issues that will bring light and illumination to this manufactured foggy issue. To subsidise is to sell a product below cost of production. Up until this time, neither the federal government nor the Nigerian National Petroleum Corporation (NNPC) has told us the cost of producing a litre of oil in our Warri, Port Harcourt or Kaduna refineries, so the nation is not in a position to take an informed stand on whether or not oil is being subsidised.

However, according to statistics from the Petroleum Products Pricing Regulatory Agency (PPRA) and National Bureau of Statistics, getting petrol to Nigerian ports costs N117.74 per litre. And because of deliberated gross inefficiency at the Nigerian ports, an additional cost of N6.25 per litre is incurred. The petrol is usually stored at the ports. It is not transferred directly from the ships to the trucks and so the ports charge N3.00 for storage and an administrative cost of N15.00. Other costs include a bridging fund of N3.95 and then the dealers add their margin of N1.75 per litre.

The transporters add their own margin of N2.70, while filling stations add a margin of N4.60. So the cost of fuel at petrol stations comes to N138.19 per litre, or approximately N140.00 per litre. And because it is sold for N65 per litre, the federal government pays the shortfall of N75.00 or thereabout on every litre of petrol. This extra N75.00 called subsidy, is what the government says will bankrupt the nation if it is not stopped forthwith.

If you have followed me so far, it will be clear to you that the federal government is not subsidising the cost of production of refined oil in our nation. What the government is subsidising is thealternative cost of importation. This shows clearly that our leaders have allowed their laziness to envelope the entire nation so that we have corporately become a lazy nation according to the biblical definition. In Proverbs 12:24, the Bible states that, “The lazy man does not roast what he took in hunting, But diligence is man’s precious possession.” Simply put, due to laziness and lack of diligence, our leaders cannot refine enough crude oil for our consumption. 

to be continued…

Advertisements

One response to “THE SIMPLE ARITHMETIC OF FUEL SUBSIDY Pt. 1

  1. Pingback: Former Petroleum Minister, Tam David West, Say Petrol Should Sell at N40.02 « ogala·

What do you think? Plz share comments

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s